What are the Current Supply Chain Management Challenges?
The success of a company depends on effective supply chain management. It is the process aimed at facilitating workflow and communication between different parties in the market. Supply chain management includes a great variety of actions performed to distribute goods, satisfy stakeholders, and increase customer value. Conventional supply chain management covers the stages of production, product development, marketing, and distribution. Expected to be the linchpin of satisfactory performance, a supply chain can often be surrounded by problems that challenge security, transparency, and reliability of a company.
“ […] the revenue of counterfeiting in the world soared to 1.2 trillion USD in 2017 […] “
What truly disrupts supply chain management is shrinkage, which may include employee theft, shoplifting, bureaucratic error, retailer fraud, and cashier oversight. Shrinkage is directly related to the reduction of inventory, which subsequently leads to a financial loss. Globally, it is estimated that shrink percentage in the retail industry accounts to 2 percent of sales on average. It happens when the amount of stock doesn’t correspond to the registered amount. The reasons for shrinkage vary, but any form of inventory loss can negatively influence security in a company as well, forcing it to incur additional expenses for protecting a supply chain.
Companies might also fail to manage and monitor their supply chains due to smuggling and counterfeiting that have been deeply entrenched in the flow of goods and services. The scope of smuggling and counterfeiting is dramatic. The Global Brand Counterfeiting Report 2018 indicates that the revenue of counterfeiting in the world soared to 1.2 trillion USD in 2017 and will not stop growing. While smugglers and counterfeiters regard illegal trade as a fertile hunting ground, manufacturers and retailers that prefer distributing authentic goods experience severe financial problems. In addition, they can face copyright misuse, customer base decrease, and reputational damage because of illicit legal operations.
“ There are many cases when producers had to cover extra costs because of inability to track transportation, to monitor product condition, and to deliver products in time.”
Inefficient supply chain management can also be associated with cold chain logistics issues, and a driver might not be the only reason for them. In fact, transportation of goods involves different steps that can influence the quality of goods. The lack of temperature requirements is one of the causes. Managers can also neglect the standards of packaging, impairing the quality of products. What affects consumer loyalty most is a delay, which can result in unexpected refunds.
Supply chain management can be also challenged by the lack of transparency. Clearly, when a customer can’t understand what he/she is offered to buy, the chances that he/she is going to actually purchase it are extremely low. To retain a customer, a company should provide information on a product. In turn, a producer should be able to validate its quality and origin. Unfortunately, traditional supply chain management can limit interactions between producers and other parties, leading to product damage or loss. There are many cases when producers had to cover extra costs because of inability to track transportation, to monitor product condition, and to deliver products in time. Every party should be responsive to inquiries and demands. Otherwise, flaws will appear in a supply chain.
“The best way to make a supply chain transparent is to use unit-level traceability platforms based on blockchain and AI.”
The sign of poor supply chain management, is also bad product analytics. When a company can’t understand its customers and forecast their demands, it means that it is doomed to failure. It is highly important to analyze trends in the market to provide customers with the necessary goods and services. Products shortage is the reason why many companies have lost their clients.
To help companies keep up standards and avoid current challenges, new digital technologies have been introduced to supply chain management, making it flexible and adaptive to new tendencies. The best way to make a supply chain transparent is to use unit-level traceability platforms based on blockchain and AI. Here, at Adents, we are offering a reliable traceability solution to all supply chain stakeholders, including brands, manufacturers, logisticians, and distributors. Adents NovaTrack is a quality end-to-end track and trace platform that is based on blockchain technologies and artificial intelligence. In addition to the above-mentioned issues, NovaTrack also addresses parallel trade, delivery noncompliance, and unreliable supply problems. Not only does it increase visibility, but it also guarantees compliance with standards and regulations. Adents creates a supportive environment for the development of different ecosystems that can easily cooperate and monitor supply chain operations.
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